Businesses that clutch on to arcane innovation practices are less likely to realize success than if they take an open, collaborative approach, according to senior IT industry analysts.
Research director for IT analyst firm Hydrasight, John Brand, believes fewer than 20 percent of organizations have formal innovation programs in place and so face more failures than successes.
Speaking at a CIO Executive Council forum in Sydney last week, Brand said innovation is difficult to manage without the right culture and "you have to foster that culture", which is best done through enterprise governance.
"The very nature of innovation is changing," he said. "It used to be isolated, but is now open as we have more complex business relationships." The driver for innovation in the future will be more "open", Brand said.
"Companies will look outside," he said. "Do we have a structured mechanism to do that? We have to semi-structure innovation."
Brand said there are a number of innovation "myths", including innovation equals improved business performance and overall business success. "There are some downsides to innovation," he said, such as the extent to which it has gone into personal robots, which are yet to yield any real value.
"It's about doing things differently. Innovation without implementation is just a good idea. A broad view of 'business value' is required."
Innovation has to be embedded into the organization's culture, Brand said.
National Australia Bank's manager of group architecture strategy, Simon Spencer, said the bank's work over the past two years has resulted in two types of innovation - big bang and grassroots.
"With the big bang stuff we spent a fair amount of money and there was a fair amount of fanfare and some of it stuck and some it doesn't fit," Spencer said. "And then there is a lot of stuff that often goes unnoticed that happens at the grass-roots, workgroup level. And a lot of that stuff actually sticks."
Spencer said examples of "big bang" innovation is service oriented architecture, and the moves to Intel architectures and utility computing. "But we've also looked at the optimization and tweaks, the leverage of platforms, and the opportunity to make architecture decisions that are very innovative [and] extend the platforms we already have."
This "grassroots" innovation is creating a culture where people can get involved. "You don't just have a top-down culture," Spencer said. "A lot of what we have done is to try to get away from that central innovation function and really promote the grassroots, small-man stuff as much as we want the big, strategic things. So it's about having a double portfolio."
Cathie Steele, general manager of the Australian Centre for Health, said over the past ten years innovation has changed dramatically and is more than just based on standard business drivers.
For example, investigations into the number of people who died as a result of simply going to hospital revealed a core communications problem. "When there are a team of people working on your health - from radiologists to pharmacists - any one can make a mistake and communications becomes vital," Steel said. "That has become a major driver for innovation in healthcare."
Steele cited delivering information to the bedside in an intensive care environment as an example of successful innovation.